i looks at some of the options available to the Chancellor as she warns of a £20bn black hole in public finances
looks at some of the options available to the Chancellor as she warns of a £20bn black hole in public financeshas warned she is set to announce some “very tough decisions” to address a public spending black hole of around £20 billion.While she is expected to focus on the cancellation of road and rail projects in the short-term, Treasury experts have told
The independent Institute for Fiscal Studies has said that raising capital gains tax towards income tax would be “fairer”, while higher tax allowances on CGT could still be made on investment to incentive the kind of wealth that boosts growth. Currently, basic rate taxpayers get 20 per cent tax relief on their contributions, while higher-rate taxpayers get 40 per cent and additional-rate taxpayers 45 per cent.
The IFS think tank has estimated that introducing a 30 per cent tax relief rate on all pension contributions could bring in £2.7 billion a year. At the moment, someone inheriting the pension of someone who dies under the age of 75 will pay no income tax on their annuity pension or drawdown money. They will also likely pay no tax on most lump sums.
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